A cash equivalent is: Options: An investment readily convertible to a known amou
ID: 2483572 • Letter: A
Question
A cash equivalent is:
Options:
An investment readily convertible to a known amount of cash.
Close to its maturity date but its market value may still be affected by interest rate changes.
Generally is within 12 months of its maturity date.
Is not considered highly liquid.
Another name for cash.
An investment readily convertible to a known amount of cash.
Close to its maturity date but its market value may still be affected by interest rate changes.
Generally is within 12 months of its maturity date.
Is not considered highly liquid.
Another name for cash.
Explanation / Answer
The answer is A) An investment readily convertible to a known amount of cash.
The defination of cash equivalent- It is a highly liquid investment having maturity of three months or less.Examples are currency, cheques,money market account,commercial papers,saving a/c, treasury bills, marketable securities.
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